Challenges of running a Western fine-dining restaurant in China, where every second guest is a food blogger

Media exposure can be a blessing and a curse, as a Shanghai restaurant given a Michelin star found to its cost, and there are other hurdles: sourcing quality ingredients, fickle diners, labour shortages and costs

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Since the first McDonald’s in China opened to much fanfare in Beijing in 1992, there’s been remarkable growth in international cuisine options across the country, especially in the largest cities.

High-end Western dining options, in particular, have increased during the past quarter century to meet demand among the nation’s increasingly affluent and cosmopolitan population. As a result, last year saw the launch of the inaugural Michelin guide to dining in China, with coveted stars presented to 26 restaurants in Shanghai.

Stefan Stiller learned the hard way about the complex world of restaurant licensing and regulations in Shanghai, after being forced to close down his Taian Table restaurant just one day after being awarded a Michelin Star in September.

The German native opened the restaurant on the first floor of a residential building, but he encountered trouble obtaining a licence before opening. Stiller says he had come to a gentlemen’s agreement with the landlord and authorities: as long as the restaurant didn’t attract too much attention, it could stay open.

The intense media scrutiny that followed the Michelin announcement was enough to shutter Taian Table.

“In China, not everything is black and white; there is a lot of grey,” Stiller says. “And there are always so many changes of rules and regulations. Sometimes you can’t get a clear answer about what’s allowed or not allowed.”

He points out that, legally, restaurants aren’t supposed to be built on the first floor of residential buildings that lack restaurant permits. “But if you walk around Shanghai,” he says, “you see that all over the place.”

Stiller was disheartened by the turn of events, but came to see the silver lining. “I was shocked, angry, sad, disappointed. But at the end of the day, we could not have achieved as much media exposure. It was a little negative, but ultimately positive.”

When it comes to dining at the highest level, only top-quality ingredients are acceptable to chefs. But for years, sourcing has been a challenge for restaurateurs in China.

“Shanghai still has a limited supply of high-quality ingredients,” Stiller says. “And a lot of ingredients are not like the variety of the rest of the world – especially very fresh and very fragile items, like seafood. There are certainly a lot of products you can get very easily in Hong Kong, Singapore, and Taiwan, but not easily in Shanghai.”

Import licences and restrictions unique to China make sourcing particular items more difficult than others. For example, in China, Italian rice – with its fat, starchy grains – is banned from import because it is very similar to Chinese round corn rice. On the other hand, Thai long-grain rice may be imported, because there is less of it grown in China.

Importing basic ingredients such as flour also incurs high import duties, which is one reason why French bakery Farine charges higher prices than other bakeries in Shanghai. It uses flour from only France.

Jerome Laurent – corporate chef for Aden Services and former owner of the one-Michelin-star Le Cilantro in his native France – agrees that sourcing is one of the biggest challenges in China. “The products are not easy to find, but especially difficult is seeing consistency in the quality. But every year we have more.”

And those who are able to secure high-quality ingredients consistently must also find and retain high-quality talent, which can be just as challenging.

With the 2015 opening of a branch of famous cookery school Le Cordon Bleu in Shanghai, more young cooks are being trained and placed into the Western dining workforce. Laurent, who served as chef-instructor at the Shanghai campus, says: “The students, they can be European, Chinese, American. They are very motivated. Some students come with no background at all, and after nine months, they finish their scholarship and most can work in any five-star hotel or Michelin restaurants, or as a manager in the service industry.”

Celebrity chef Eduardo Vargas, who owns Azul restaurant, has trained numerous chefs during his 15-year stay in Shanghai. In that time, the Peruvian has opened 20 restaurants and managed more than 500 staff. For him, the challenge now is not about finding quality talent; it’s about being able to retain them. “I used to pay 1,500 yuan per month for a cook in 2002,” Vargas says. “Now I won’t have anyone working for less than 5,000. There are too many other places where they can get at least that. Competition is tough.”

Stiller, however, notes that fewer and fewer young people are choosing to enter the food and beverage industry, in general, not just in Shanghai. “A lot of Shanghainese are not really looking to work in service; they’re looking for something more white-collar. It is the same problem all over the world – young people are not keen to work these hours or work on the weekends.”

In the rapidly changing Chinese market, local customers make up a particular demographic and have different expectations from their European counterparts.

“In Europe,” Stiller says, “many restaurants have existed for centuries. In Shanghai, people are always looking for the next new thing. Even if they go a few times to a great place, with great service, it’s not enough. People get bored very fast.” In part, because of this, Stiller creates a completely new menu for his restaurant every month.

For China, everything is possible, but nothing is easy

Stefan Stiller

The demanding clientele is also growing younger, with young Chinese adults more interested in trying new food, experiencing Western culture and learning about wine.
“Young people [in Europe] don’t really have the money to eat out at these kinds of restaurants,” Stiller says. “At [Taian Table], the average age may be 30, maybe younger sometimes. When I first started working in Shanghai in 2004, my clientele was mostly foreigners. Now it’s flipped – 90 per cent of the diners at Taian Table are local Chinese.”

Along with the shift in clientele, there’s also a shift in diners’ mentalities: with digital technology, anyone can be a restaurant critic or a self-proclaimed foodie. “Our industry is challenging,” Stiller notes. “Social media makes it so easy to send a message to others, to spread news both good and bad. And every second person is a food blogger, so you get feedback instantly. It’s important to be detailed, focused, and do almost everything right.”

Despite the challenges of running a fine-dining establishment in China, Stiller, Vargas, and Laurent say the benefits still outweigh the negatives.

Stiller and his team opened the original Taian Table in two months, renovating their empty shell of a space into a full restaurant. “In the Western world, what we accomplished would be almost impossible, because everything takes longer. Sometimes in China, you can get things done very fast. The mindset is different, there are more resources, people work faster, and they are more open to putting a lot of effort into something.”

For Stiller, the main attraction to working in China over the past 13 years has been the constant activity and variety of life – something he says is missing in the tradition-bound markets of Europe. “Shanghai is very fast-paced, but it’s never boring,” he says. “When I travel back to Europe or to Germany, it’s like nothing happened in the past year. Time stands still. Here, it’s so vibrant and always full of action. It gives you a lot of energy.”

You can’t change a place, you have to adapt. You have to change yourself

Eduardo Vargas

For Vargas, the opportunity to work in such a rapidly developing Chinese city such as Shanghai has been a once-in-a-lifetime experience. As one of the city’s pioneering Western chefs, he says he feels as if his impact on the international dining scene was not only much greater, but also more fulfilling.

“Being able to help a bit to develop the Western dining scene in China, especially in a time when foreigners were just starting to open restaurants here – that’s a special thing,” Vargas says. “Many of my former staff have opened a lot of restaurants. I’ve helped develop the community, including the local talent.”

After working in Asia for years, Laurent notes how his sensibilities have adapted. “When you live in Asia, your taste changes automatically as well, because the influences come from everywhere: Asian cuisine, products and client feedback. To be a chef requires the use of all senses, so you change your cuisine sensibility.”

And Vargas contends that these evolutions are not only natural, they’re essential to succeeding in China.

“If you come with your foreign mentality, thinking, ‘I’m going to do it my way,’ you’re going to screw up big time,” he warns. “You have to come to this country and see that it works differently than anywhere else. You can’t change a place, you have to adapt. You have to change yourself.”